Sample questions relating to Chelsea leasehold conveyancing
Having checked my lease I have discovered that there are only 72 years unexpired on my lease in Chelsea. I now wish to get lease extension but my landlord is can not be found. What should I do?
On the basis that you qualify, under the Leasehold Reform, Housing and Urban Development Act 1993 you can apply to the County Court for for permission to dispense with the service of the initial notice. This will mean that your lease can be granted an extra 90 years by the magistrate. You will be obliged to demonstrate that you have used your best endeavours to find the landlord. For most situations an enquiry agent would be useful to try and locate and to produce an expert document to be used as proof that the landlord is indeed missing. It is advisable to get professional help from a property lawyer in relation to investigating the landlord’s absence and the vesting order request to the County Court covering Chelsea.
Estate agents have just been given the go-ahead to market my ground floor flat in Chelsea.Conveyancing is yet to be initiated but I have just received a yearly maintenance charge invoice – should I leave it to the buyer to sort out?
The sensible thing to do is pay the service charge as normal because all ground rent and service charges will be apportioned on completion, so you will be reimbursed by the buyer for the period running from after the completion date to the next payment date. Most managing agents will not acknowledge the buyer until the service charges have been paid and are up to date so it is important for both buyer and seller for the seller to show that they are up to date. This will smooth the conveyancing process.
I am looking at a two apartments in Chelsea which have in the region of 50 years unexpired on the leases. Should I regard a short lease as a deal breaker?
There are no two ways about it. A leasehold flat in Chelsea is a wasting asset as a result of the reducing lease term. The closer the lease gets to zero years unexpired, the more it reduces the value of the premises. For most buyers and mortgage companies, leases with less than 75 years become less and less attractive. On a more positive note, leaseholders can extend their leases by serving a Section 42 Notice. One stipulation is that they must have owned the property for two years (unlike a Section 13 notice for purchasing the freehold, when leaseholders can participate from day one of ownership). When successful, they will have the right to an extension of 90 years to the current term and ground rent is effectively reduced to zero. Before moving forward with a purchase of premises with a short lease term remaining you should talk to a solicitor specialising in lease extensions and leasehold enfranchisement. We are are happy to put you in touch with Chelsea conveyancing experts who will explain the options available to you during an initial telephone conversation free of charge. A more straightforward and quicker method of extending would be to contact your landlord directly and sound him out on the prospect of extending the lease You may find he or she is happy to negotiate informally and willing to consider your offer straight off, without having to involve anyone else. This will save you time and money and it could help you reach a lower price on the lease. You need to ensure that any new terms represent good long-term value compared with the standard benefits of the Section 42 Notice and that onerous clauses are not inserted into any redrafting of the lease.
I work for a reputable estate agency in Chelsea where we see a few leasehold sales derailed as a result of leases having less than 80 years remaining. I have received conflicting advice from local Chelsea conveyancing firms. Could you shed some light as to whether the owner of a flat can initiate the lease extension process for the buyer?
As long as the seller has been the owner for at least 2 years it is possible, to serve a Section 42 notice to kick-start the lease extension process and assign the benefit of the notice to the purchaser. The benefit of this is that the proposed purchaser can avoid having to wait 2 years for a lease extension. Both sets of lawyers will agree to form of assignment. The assignment needs to be completed before, or simultaneously with completion of the disposal of the property.
Alternatively, it may be possible to extend the lease informally by agreement with the landlord either before or after the sale. If you are informally negotiating there are no rules and so you cannot insist on the landlord agreeing to grant an extension or transferring the benefit of an agreement to the purchaser.
Can you offer any advice when it comes to choosing a Chelsea conveyancing firm to deal with our lease extension?
If you are instructing a property lawyer for your lease extension (regardless if they are a Chelsea conveyancing firm) it is most important that he or she should be familiar with the legislation and specialises in this area of work. We suggested that you speak with several firms including non Chelsea conveyancing practices before you instructing a firm. Where the conveyancing practice is ALEP accredited then so much the better. Some following of questions might be useful:
- How experienced is the practice with lease extension legislation?
After months of correspondence we simply can't agree with our landlord on how much the lease extension should cost for our flat in Chelsea. Can we issue an application to the Residential Property Tribunal Service?
if there is a missing freeholder or if there is disagreement about what the lease extension should cost, under the relevant statutes you can apply to the LVT to calculate the sum to be paid.
An example of a Lease Extension decision for a Chelsea flat is 150A Albert Palace Mansions Lurline Gardens in July 2013. The Tribunal determined that the premium payable for the new lease of the subject property was £42,069 This case was in relation to 1 flat. The the unexpired residue of the current lease was 57.06 years.